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Thursday, March 2, 2017

Employment and Benefits Law Alert: Developments of the First 100 Days

Since the days of
former President Franklin D. Roosevelt, the United States has closely
tracked a new president’s first 100 days in office. Here at Gray Plant
Mooty, our employment and labor law teams have been monitoring and will
continue to track activity by the Trump administration in the employment and
benefits law area. This alert is the first in what we intend to be a series of
updates to our employer clients on key developments during the first 100 days.

Department of Labor DevelopmentsWhen President Trump
was elected in November 2016, the U.S. Department of Labor (DOL) was fighting
multiple legal battles over rules it had promulgated during President Obama’s
term in office. With President Trump’s election, the DOL’s commitment to moving
forward with those rules is uncertain. We expect to know more if and when
Alexander Acosta, the nominee for Secretary of Labor, is confirmed, but
here is where the DOL lawsuits and related rules stand:

FLSA Overtime Rule – Last year, the DOL issued a Fair Labor
Standards Act (FLSA) rule to increase the minimum weekly salary threshold for
the FLSA “white collar” overtime exemptions from $23,660/year to $47,476/year.
The rule was set to become effective December 1, 2016, but, before that date, a
federal judge in Texas enjoined the rule. The DOL filed an expedited appeal
before President Trump took office. After Trump took office, the DOL filed a
request for a briefing extension in its appeal, citing the need to assess the
impact of the new Presidential administration on the appeal. The Fifth Circuit
granted the DOL’s request and its brief is due on May 1, 2017. The DOL’s filing
signals the possibility that the DOL may abandon or seek to modify its FLSA
overtime rule.

Persuader Rule – The DOL also passed the “persuader rule”
last year. This rule would require companies and their consultants (including
law firms) to disclose amounts spent on efforts to persuade employees not to
unionize. In November 2016, a federal judge in Texas enjoined the rule, and the
DOL appealed before President Trump took office. The DOL has not yet taken any
action on its appeal since President Trump took office.

The ACA (aka Obamacare): President Trump issued an executive order on
his first day in office related to the ACA. The order doesn’t change any legal
requirements, but it does require that federal agencies use their discretionary
authority to waive or defer requirements that impose a fiscal burden on
individuals, states, providers, insurers, purchasers of health insurance, and
the like. Interestingly, employers are not specifically mentioned in the order
as needing a waiver from fiscal burdens, but many employers fall into the
category of “purchasers of health insurance.” Following the order, the IRS has
used its discretionary authority to announce that it will accept individual tax
returns even if they don’t include information about health insurance coverage.
Importantly, employers should remember that, for the time being at least, the
ACA’s individual and employer coverage mandates are still in effect. As such,
GPM is advising employers with 50 or more employees to continue complying with
the employer mandate, including the obligation to file Form 1095-C.

Health-Insurance-Related
Proposals: So far in President Trump’s first 100 days,
there have been a number of proposals for ACA replacements. House Republicans
are suggesting increases to the amount that can be contributed to a Health
Savings Account (HSA), substituting a per-person tax credit for the need-based
subsidies on the exchanges, capping the amount of employer-sponsored health
coverage that can be excluded from income (a Cadillac tax by another name?),
gradually eliminating the Medicaid expansion under Obamacare, and turning
Medicaid into per-person or block grants to the States. Stay tuned – these
ideas are just proposals at this time.

Fiduciary Rule: The DOL’s “fiduciary” rule would require
all financial professionals who work with retirement plans or provide
retirement planning advice to act in a fiduciary role when advising such plans,
regardless of whether they are being paid for such advice. On February 8, 2017,
a federal judge in Texas upheld the legality of the rule and denied a request
for the rule to be enjoined. No appeals have been filed, but President Trump
has asked the DOL to delay implementation of the rule to allow time for further
analysis of its practical effects. The rule was set to be effective in April
2017, but is now expected to be delayed until at least October 2017. Most
commentators anticipate that the rule will be withdrawn, although that process
would take some time. So, again, stay tuned.

National Labor Relations Board

The National Labor
Relations Board (NLRB), which oversees union-employer relations and
non-management labor rights, has been the subject of minimal activity so far.
The lone Republican member of the NLRB, Phil Miscamarra, was named acting
Chairman of the NLRB by President Trump. Miscamarra currently serves on the
NLRB with two Democrat members, both appointees of President Obama. The NLRB
General Counsel is also currently a President Obama appointee. The NLRB
currently has two vacant seats, which are both Republican-controlled. It is
rumored that Trump is considering the following candidates as nominees: William
Emanuel, Partner at Littler Mendelson, P.C. (Los Angeles); Doug Seaton,
Senior Counsel at Seaton, Peters, and Revnew, P.A. (Minneapolis); Marvin
Kaplan, Counsel at the Occupational Safety and Health Review Commission (Washington,
D.C.); and Zachary Fasman, Partner at Proskauer Rose L.L.P. (New York).

The Equal Employment Opportunity Commission

In January, President
Trump named Equal Employment Opportunity Commission (EEOC) commission Victoria
Lipnic to be the acting chair of the commission. While President Trump’s plans
for the EEOC are not yet clear, predictions have been made that his
administration may scale back on the EEOC’s strategic enforcement agenda to
extend Title VII protections to LGBTQ applicants and employees. Despite these
predictions, President Trump announced in late January that he intended to
leave in place an executive order of President Obama that protects LGBTQ
employees of federal government contractors from discrimination. The EEOC has
asked, however, for an extension in one of its LGBTQ lawsuits to assess the
direction of the case. In addition, on February 22, 2017, the Trump
administration withdrew an Obama-era guidance issued by the U.S. Department of
Education that provided for schools to allow transgender students to use
bathrooms corresponding to gender identity. The EEOC has issued similar
guidance on workplace bathroom access. GPM will be continuing to track EEOC
related developments under the new administration and the impact on potential
employer obligations.

Employee Benefits

The Trump
administration has made it clear that it has big plans for employee benefit
plans, issuing promises to repeal and replace the Affordable Care Act (ACA), to
revisit the DOL’s fiduciary rule, and to undertake tax reforms that could
change the landscape for retirement plans. In its first month, the Trump
administration issued some benefits-related executive orders, but, as to what
employers need to do so far, it’s essentially “Hurry up and Wait!”

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